Analysis

MERGER ACQUISITION-GROUP A

MERGER ACQUISITION-GROUP A 2

Team Paper

Rymario Armstrong/ Nicole Futch

Marina Layvand

MBA515 Accounting for Management Decisions

Park University

9 October 2020

Cross-Sectional Analysis of Income, Balance, and Cash

The two acquisition targets will be Marriot International and Hilton Hotels Groups. The common size financial statements will be showing the income statement, balance sheet and cash flow statement.

Marriot International

Marriot International Income Statement (The Wall Street Journal, 2020)

	31st December 2019	31st December 2018	31st December 2017	31st December 2016	31st December 2015
Sales/revenue	20,972	20,758	20,452	17,072	14,476
Net income	1,273	1907	1,459	780	859
Net Margin	6.07%	9.19%	5.99%	5.67%	5.93%

Analysis:

Marriot International Balance Sheet

	31st December 2019	31st December 2018	31st December 2017	31st December 2016	31st December 2015
Account and note receivable net	9.56%	9.00%	8.31%	7.02%	18.13%
Current Assets	12.48%	11.42%	11.47%	13.96%	22.76%
Intangible Assets	70.61%	73.51%	75.21%	69.88%	39.36%
Noncurrent assets	87.52%	88.58%	88.53%	86.04%	77.24%
Total assets	100.00%	100.00%	100.00%	100.00%	100.00%

Analysis:

Marriot International Cash Flow

	31st Dec 2019	31st Dec 2018	31st Dec 2017	31st Dec 2016	31st Dec 2015
Net Income Growth	-33.35%	30.71%	87.05%	-9.20%	n/a
Net Operating Cash Flow Growth	-28.51%	5.84%	40.77%	10.63%	8.60%
Net Operating Cash Flow/ Sales	8.03%	11.35%	10.89%	9.27%	9.88%

Analysis:

Hilton Hotels Corp.

Hilton Hotels Corp Income Statement

	31st Dec 2019	31st Dec 2018	31st Dec 2017	31st Dec2016	31st Dec 2015
Sale/revenue	8,198,000	7,574,000	6,862,000	6,900,000	8,540,000
Net Income	9,452,000	8,906,000	8,131,000	7,60,000	8,800,000
Net Margin	9%	9%	13%	10%	12%

Analysis: The Hilton has been bringing in steady sales. They have retained a less than 2 million range in the past 5 years in total sales. The Net income has also remained within a less 2 million range of difference. Despite market fluctuations, they continue to do well. This reflects in their profit margins. The margins have remained consistent. They could stand to potentially widen that margin if we take over by reducing their operating costs. Large areas of overhead costs for the Hilton include properties. We could continue expanding their current investments in areas that may still have tourism, without as high of property costs.

Hilton Hotels Corp Balance Sheet

	31st Dec 2019	31st Dec2018	31st Dec 2017	31st Dec2016	31st Dec 2015
Accounts and note receivable	5.00%	5.59%	4.62%	4.16%	3.92%
Current Assets	20.27%	17.60%	17.52%	14.70%	14.81%
Intangible Assets	9.06%	11.92%	6.01%	9.34%	8.91%
Noncurrent assets	79.73%	82.40%	82.48%	85.30%	85.19%
Total assets	100.00%	100.00%	100.00%	100.00%	100.00%

Analysis: The Hilton is excellent in collecting debts owed to them. Their accounts receivable stays consistently low. They may reflect them having a fiscally-sound customer base. We will hope to continue having this consumer interest if we acquire them. Their current assets include things such as cash on. They carry a healthy amount on current assets. This is beneficial to them as current assets can be used when unexpected changes to the market occur. They have been building their current assets, making them stronger in market changes. Their intangible assets can include their copyrights on their brands and resorts. This will shift to our branding costs if they change their name. The non-current assets include their investments. The Hilton has grown to several chains since their opening. They show an interest in expanding whenever, and wherever possible. We can continue this investment in expansion, or we can decrease their expansion to create more on-hand assets.

Hilton Hotels Corp Cash Flow

	31st Dec 2019	31st Dec 2018	31st Dec 2017	31st Dec 2016	31st Dec 2015
Net Income Growth	-0.39%	96.68%	91.67%	64.52%	n/a
Net Operating Cash Flow Growth	26.10%	-41.91%	19.07%	7.17%	69.56%
Net Operating Cash Flow/Sales	8.57%	7.66%	13.16%	11.13%	10.63%

Analysis: The Hilton is decreasing its cash on hand. This can be for several reasons. One is market fluctuations. If prices of operation increased unexpectedly, they make have has to use available cash to pay for the difference. Things such as a pandemic can cause businesses to use cash to account for the decreased consumer interest when operating costs remain high. It can also mean they are putting more into their investments. In 2017, Hilton began buying back some of its own stock. This could account for the decrease in cash to support their stockholder position.

Reference

The Wall Street Journal (2020). MAR | Marriott International Inc. Annual Cash Flow - WSJ. Retrieved September 20, 2020, from https://www.wsj.com/market-data/quotes/MAR/financials/annual/cash-flow/

The Wall Street Journal. (2020). H | Hyatt Hotels Corp. Stock Price & News - WSJ. Retrieved September 20, 2020, from https://www.wsj.com/market-data/quotes/H//